IoD welcomes Government announcement on executive pay

Dated: 23 January 2012

Commenting on the speech of Dr. Vince Cable to the House of Commons this afternoon, Dr. Roger Barker, Head of Corporate Governance at the Institute of Directors, said:

“We welcome the measures announced by the Secretary of State this afternoon. Greater simplicity and transparency in the reporting of executive pay is urgently needed. A binding shareholder vote on executive remuneration policy will remind institutional investors of their key governance responsibilities. The Government is also right to consider ways in which boards of directors can become more diverse – companies must incorporate views beyond those of current and former executives in the setting of CEO pay.”

Commenting further, Dr. Barker said:

“The Government has done the right thing in rejecting calls for the mandatory inclusion of employees on remuneration committees. Nonetheless, boards should still consider ways in which they can engage with employees and other stakeholders on remuneration policy. This will be an important means of rebuilding trust in the UK business system, which has been understandably dented by the magnitude of recent increases in executive pay.”

 

ENDS

Contact Points

Edwin Morgan
Media Relations Manager
Institute of Directors, 116 Pall Mall, London SW1Y 5ED
Tel: +44 (0)20 7451 3392
Mob: +44 (0)7814 386 243
Email: edwin.morgan@iod.com
Website: www.iod.com/policy

Notes to editors

  • The Institute of Directors (IoD) was founded in 1903 and obtained a Royal Charter in 1906. The IoD is a non-party political organisation with approximately 38,000 members in the United Kingdom and overseas. Membership includes directors from right across the business spectrum – from media to manufacturing, e-business to the public and voluntary sectors. Members include CEOs of large corporations as well as entrepreneurial directors of start-up companies.
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  • For further information, visit our website: www.iod.com